Partnership agreements

Your agreement should set out the rules governing how the partnership operates, and should cover the main ´What happens if ...´ situations. If there is no agreement, there will be a large element of uncertainty, and applying the underlying law, such as the Partnership Act 1890, may well lead to undesirable results.

It is usually best to have a partnership agreement drawn up by a solicitor, but before you reach that stage you should think about exactly what you want the agreement to cover. In particular, you should consider:

Running the business

Partners' duties

Working hours and holidays

Decision-making procedures

Business premises

Cars

Financial matters

Profit-sharing arrangements, and drawings on account

Partnership capital (and interest arrangements)

Banking and financial arrangements

Accounting arrangements

Making provision for tax payments

To identify what is partnership property for the availability of 100% (as opposed to 50%) business property relief for inheritance tax purposes.